Indonesia builds nickel midstream past Chinese capital
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- China Chamber of Commerce in Indonesia sent an open letter to President Prabowo Subianto in May warning that mining quota cuts and new foreign-exchange retention rules were undermining investor confidence; major Chinese smelters subsequently throttled output and put expansion plans on hold.
- Danantara, Indonesia's sovereign wealth fund, announced plans in 2025 to develop 26 downstream projects worth roughly $12.4 billion across mining, metals, energy and agriculture, explicitly aimed at retaining more value domestically rather than exporting semi-processed ore.
- MIND ID bought a further 14% stake in nickel miner PT Vale Indonesia in July 2024 to become its controlling shareholder at 34%, providing what the authors call a working precedent for Indonesian-led ownership without foreign technical partners disappearing.
- Danantara signed a memorandum with France's Eramet in May 2025 for an integrated nickel-to-battery investment platform, then announced a separate cooperation agreement with China's GEM three months later to develop a nickel processing hub.
- Indonesia imports 85–95% of its domestic advanced battery demand, with roughly 60–70% of that import value coming from China — despite the country holding some of the world's largest nickel reserves.
- About 90% of EVs sold in Indonesia run on lithium iron phosphate (LFP) batteries, a chemistry that uses no nickel at all, and BYD's nickel-free Datang SUV drew 150,000 pre-orders in China in under two months.
Why it matters: Indonesia sells raw and semi-processed nickel abroad, then buys back finished batteries — 85–95% of which are imported, with 60–70% of import value flowing from China. If Danantara executes its 26-project, $12.4 billion midstream pipeline and follows the Eramet/GEM partnership template, Jakarta can intercept its own ore before export and capture the value its current strategy leaks back to Chinese battery makers.
